Creative & Design Agency Margins - What Should They Be?

As a creative agency owner profit was always on my mind. If our margins were good, we’d make a profit and like every business, this is the key to success.
But being an agency owner, we often work in isolation away from our competitors. I spoke with a client last week who commented that creative agency owners should come together and chat more. The benefits are clear to see, but many of us prefer not to show our hand to our competitors. And I’ll admit, I was one of those people. My reply was that “I’d have never shared sensitive information relating to my agency while I was a competitor.”
And yet, here I am with no skin in the game, no agency behind me and none of you reading this article are my competitors. I’m in a unique and enviable position where I can share the knowledge and experience gained working with creative entrepreneurs like you, for the benefit of all my clients and future clients.
This benefit is wide-reaching across every business function, but if we start with our profit, how do we all compare?
The figures noted below will give you an indication of profit margins I’d expect to see from creative agencies at different stages of their business. And I say that loosely because the factors that contribute to your creative agency margin are unique to your business.
When I’m asked the question about what a good creative agency margin looks like, the answer generally starts with “more”.
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